debt

Student Financial Aid Goes To The Rich And The Poor Get Debt Instead

Did you know rich students get financial help from colleges while the poor ones get laden with debt instead?  Such is the conclusion of a new report, Demerit Aid, from the New America Foundation.  While Pell grants tallied $35 billion in 2012, universities are reducing their own financial aid based on income and instead, shifting those funds to the wealthy students.

The Student Loan Money Machine

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Going to college these days amounts to sinking oneself into a lifetime of massive debt.  A new student advocacy report spells out some damning facts.  Did you know the federal government is slated to make a whopping $34 billion in 2014 off of student loans?  Meanwhile other reports are showing student debt is keeping people from obtaining credit, buying a home and moving on with their lives.

Sequestration Suicide

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For once he's right.  President Obama came out blasting against the upcoming sequestration as a major threat to the U.S. economy.   He's right.  These draconian cuts, $85 billion for FY 2013, will be enacted starting in March 2013 if Congress doesn't stop it.  The CBO estimates this year's budget costs will cost the United States a full 1.5 percentage points of GDP.

Low Income Households Have Expenses More Than Twice Their Income

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A shocking claim was made by various press sources that those at the bottom of the American economic pile have living expenses which are double their income.

The bottom fifth of the U.S. income distribution -- 24.4 million households -- on average earned $10,074 in after-tax annual income and spent $22,001 last year,

Student Loan Debt Time Bomb

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ozzieharrietAh, the American Dream.  Go to college, work hard, graduate, get a good job, career and then you'll be set for life with high earnings, enough money to buy a home, raise a family and retire comfortably.

Oops, rewind, this isn't the Ozzie and Harriet show, it's real life.  Did you know student debt is one of the few debts one cannot declare bankruptcy on, no matter what?  That literally you have to be in a pine box, or close to it, to have your debt forgiven?  That 53.6% of those under the age of 25 with a four year college degree or better cannot find a job?

Student loan debt is now the next great bubble, threatening the U.S. economy as the mortgage crisis did. The NACBA released a study and calls student loan debt the next financial crisis, on the level of the mortgage crisis.

  • College seniors who graduated with student loans in 2010 owed an average of $25,250, up five percent from the previous year. Borrowing has grown far more quickly for those in the 35-49 age group, with school debt burden increasing by a staggering 47 percent.

Will New Oversight of Credit Reports Stop Unscrupulous Debt Collectors?

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The newly formed Consumer Financial Protection Bureau will start to oversee the companies who generate credit reports on you. That's Experian, Equifax and TransUnion plus about 30 more.

This action can come none too soon. Unscrupulous debt collectors inaccurately report actions to credit reporting bureaus all the time, especially for Medical bills. Getting these illegal collections or inaccuracies and errors off of one's credit report is next to impossible. Credit reporting agencies simply do not respond it seems to challenges. Experian, as an example, doesn't even have a phone number! Of course you can sue them, but even small claims court is not for the faint of heart and it's not guaranteed one will win, even when being in the right.

One of the biggest problems turning up on credit reports are medical bills. Who does not know billing from Medical facilities is loaded with errors, duplicates and mistakes? Yet more and more Medical companies are turning into the sellers of debt and even bring debt collectors into the Medical practices themselves. That's sloppy, inaccurate medical debt, often for services subpar or not rendered. Literally the health care sector is in the business of selling debt, demanding loan shark interest rates, almost the minute you walk out the door from their facility.

China Mainlined Into U.S. Debt

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china currency China is now mainlined directly into U.S. debt. Reuters uncovered an astounding thing. The U.S. Treasury has literally set up a direct line for China to buy U.S. treasuries, bypassing brokers and any third party. China is the only country with this privledge. Those thinking this administration would confront China on currency manipulation, think again. Instead our government gave China real time direct access to dynamically control the value of the Yuan.

China can now bypass Wall Street when buying U.S. government debt and go straight to the U.S. Treasury, in what is the Treasury's first-ever direct relationship with a foreign government, according to documents viewed by Reuters.

China, which holds $1.17 trillion in U.S. Treasuries, still buys some Treasuries through primary dealers, but since June 2011, that route hasn't been necessary.

The documents viewed by Reuters show the U.S. Treasury Department has given the People's Bank of China a direct computer link to its auction system, which the Chinese first used to buy two-year notes in late June 2011.

China can now participate in auctions without placing bids through primary dealers. If it wants to sell, however, it still has to go through the market.

The change was not announced publicly or in any message to primary dealers.

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